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©Philippe Lissac
At the initiative of the Grameen Crédit Agricole Foundation, a group of donors and microfinance platforms has worked on a set of principles to better support the microfinance sector during the health and economic crisis caused by Covid-19. Grameen Crédit Agricole Foundation, ADA, Alterfin, Cherry, CIDR Pamiga, Cordaid Investment Management, Crédit Agricole CIB India, CA Indosuez Wealth (Asset Management), European Microfinance Network, FS Impact Finance, InFiNe.lu, Inpulse, Luxembourg Microfinance And Development Fund, MCE Social Capital, Microfinance Center, Rabo Foundation, SIDI, SIMA And Social Performance Task Force are the first signatories of a joint commitment aimed at supporting microfinance institutions and vulnerable clients during this crisis.
Globally, microfinance institutions provide financial and non-financial products and services to more than 140 million low-income clients [1]. Microfinance plays a vital role in financing income-generating activities in both the formal and informal sectors. In the context of the Covid-19 crisis, microenterprises in the informal economy and small businesses are a key component of economic and social recovery. Supporting microfinance institutions in this context is therefore of paramount importance to protect their most vulnerable borrowers.
Faced with these challenges, a group of donors and microfinance platforms have taken up the challenge and established a common commitment: “ Key principles to protect microfinance institutions and their clients in the Covid-19 crisis ". It aims to guide donors and other stakeholders to better support microfinance institutions and vulnerable clients during this crisis. It draws on best practices and tools from the microfinance sector, such as the work carried out by the Social Performance Task Force [2] and the IAMFI Principles on Debt Rescheduling in Microfinance [3].
The fundamental principles of this commitment are the pooling of available information, analyses, and anticipations, as well as the concerted implementation of shared decisions. The signatories agree to coordinate policies, technical assistance, and resources to help microfinance institutions cope with the crisis. The objective is to protect both microfinance institutions and their clients, ensuring continued access to financing under the best possible conditions and ensuring the well-being of clients and staff.
Because individual obligations and mandates may influence how the commitment's provisions are implemented, this is not a legally binding agreement. It is not a fixed document; it may be improved as needed to better respond to the evolving crisis. Signatories to the commitment will maintain open communication with their peers to share their decisions and adhere to these principles.
The signatories invite other stakeholders to join this joint and committed initiative. The involvement of private, public, and solidarity-based actors is central to monitoring and supporting the actions of microfinance institutions worldwide. Strengthening the impact of financial inclusion is essential to combating poverty in this unprecedented context.
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[1] Microfinance Barometer 2019
[2] https://sptf.info/resources/covid19
[3] Charting the Course: Best Practices and Tools for Voluntary Debt Restructurings in Microfinance, IAMFI, Morgan Stanley, 2011. The document is available on Findev Gateway
Interview with Aurélie Bellemin, Director, Solidarités Foundation by CA Centre-Est
©FGCA
Within the Crédit Agricole group, Centimes solidaires is taking off. After a successful first edition in 2018 on the Montrouge and Saint-Quentin campuses, the new edition took place from November 18 to 22, 2019. Organized by the Grameen Crédit Agricole Foundation, Crédit Agricole SA and CA Centre-est, the operation changed scale and extended to the three company restaurants of CA Centre-est Lyon-Champagne-au-Mont-d'Or, Bourg-en-Bresse and Mâcon).
With more than €8,600 raised across all sites, the funds will finance Entrepreneurs du Monde's ICI program, which supports entrepreneurship projects led by refugees, single parents, and homeless people.
Aurélie Bellemin, General Delegate: This is a wonderful collective adventure within Crédit Agricole to finance projects with a social impact. At five of the Group's sites, employees can, if they wish, make a donation of 0.50 cents (or more!) when they pay for their meals in the collective restaurants. The warm welcome the initiative received in 2018 in Montrouge and Saint-Quentin encouraged CA Centre-est to join the operation and organize it at our three sites in 2019.
The generosity of our employees, our service provider, and the Regional Fund raised €1,360, supplemented by a matching contribution from the Regional Fund. Solidarity Centimes is an initiative that promotes Crédit Agricole's mutualist spirit. Employees participate and feel involved in the concrete results of the initiative.
For the second year, we are donating the funds raised to the NGO Entrepreneurs du Monde to fund its Incubation, Création, Inclusion (ICI) project, a program that aims to help vulnerable people integrate into society through the creation of microenterprises. Beneficiaries are trained and supported by volunteers and experts to bring their professional projects to fruition, with a focus on digital technology and sustainable catering. Thanks to 2018 donations, around forty training courses have already been funded.
Yes, during the launch of the operation in November, Crédit Agricole employees from Montrouge and Lyon met with Rania, supported by Centimes Solidaires, who came to present to us the entrepreneurial project she created. Rania is a Syrian refugee who, thanks to the support of Entrepreneurs du Monde, succeeded in launching her catering business based on Syrian specialties. This type of meeting helps to change the way we look at refugees and to understand that, beyond preconceived ideas, these are inspiring human destinies.
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Source : 2019 Integrated Report, Grameen Crédit Agricole Foundation. Download here
Interview with Jean-Farreau Guerrier, Coordinator, Entrepreneurs du Monde Haiti
©Nicolas David
Access to clean energy is essential to meeting the needs of populations, particularly in rural and isolated areas. In Haiti, the social enterprise Palmis Enèji, in which the Foundation is a shareholder, provides a solution with ecological and economical cooking and lighting equipment. Coordinated by the NGO Entrepreneurs du Monde, the project continues to expand. It notably benefited from a Solidarity Bankers mission through the Foundation in anticipation of an upcoming fundraising round.
Jean-Farreau Guerrier, Coordinator: Palmis Enèji is a Haitian social enterprise specializing in the distribution and maintenance of clean cooking and lighting equipment for the most disadvantaged households in Haiti. In our country, the situation is critical and requires action. Already among the poorest on the planet, Haiti is experiencing a crisis that is severely affecting its population. Street protests are frequent, the security situation is deteriorating, and some areas are completely inaccessible. Affected by inflation of nearly 20%, households are losing purchasing power. 62% of them remain without access to electricity, and up to 85% in rural areas. As a result, families rely on candles or kerosene for lighting and charcoal for cooking. With its solar stoves and lamps, Palmis Enèji offers solutions to replace these rudimentary methods.
Through partnerships with microfinance institutions, Palmis Enèji offers financing solutions that facilitate the acquisition of equipment. Many households and professionals are thus converting to cooking with LPG gas, which is much less harmful than cooking with charcoal. The poorest families living in rural areas have almost no access to LPG, so they use our improved charcoal stoves, which consume 20% to 30% less than traditional stoves. Our solar lamps also provide them with light, a healthier and more comfortable lighting than candles. These solutions allow the poorest families to save money while reducing their ecological footprint: we estimate that we have contributed to saving more than 153,000 tons of forest wood and reducing harmful CO2 emissions by more than 203,000 tons. Finally, Palmis Enèji supports economic activity with a network of franchised microenterprises. The words of one of our resellers testify to the social utility: “I am proud to see the light shining in our families.”
We are pursuing the strong objective of making our health- and environmentally-friendly equipment accessible to everyone, in every village. To this end, we are prioritizing three projects: access to LPG through distribution centers in the center of the country and in the Grande-Anse department; the development of after-sales service; and the diversification of our product range.
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Source : 2019 Integrated Report, Grameen Crédit Agricole Foundation. Download here
Interview with Laurence Lebrun-Renoult, Managing Director, CA Val de France
©Philippe Lissac
Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA, Solidarity Bankers is a skills-based volunteer program that offers Group employees technical assistance missions with organizations supported by the Foundation. In 2019, the Val de France Regional Bank supported a Solidarity Bankers mission in Cambodia. For 10 days in September, Dominique Rombczyk, Risk Analyst at the Regional Bank, went to Cambodia to carry out a "financial management" mission for the Cirque Phare (PPSE), a social enterprise in which the Foundation is a shareholder.
When one of our employees took the initiative to apply for a Solidarity Banker mission, our Fund naturally supported his request and granted a week of skills sponsorship. Dominique Rombczyk was thus able to put his skills to use in the financial management of Cirque Phare (PPSE). PPSE is a Cambodian social enterprise that promotes social integration and youth empowerment through arts and culture. This is a source of pride for us because the approach is fully in line with our support values.
Solidarity Bankers is one of those programs that makes us more aware of the social consequences of our banking activities. It advances a sustainable vision of finance, both in practice and in spirit. Within our Regional Bank, the initiative led by our employee has made it possible to share and disseminate within the teams the human qualities of openness and commitment that we promote. In addition to communication at the Group level, his experience has, for example, made the headlines in internal communications. For us bankers, knowing how to mobilize our skills to serve others, opening up and adapting to a different context and to different issues are skills, "soft skills," that must inhabit our profession.
As a regional bank, the issue of territorial social cohesion is a strategic priority. The CA Val de France Foundation leads initiatives in favor of local or regional associations working towards youth inclusion on the one hand, and intergenerational support on the other. We operate with them through skills sponsorship, on a voluntary basis, based on the same model as the Solidarity Bankers missions. For example, we are launching a project for youth training, for which all the expertise of our employees is welcome for support missions: assistance with financial management, animation, advice, etc. We also work with young people to support isolated people, often elderly people, which fosters dialogue between generations. All of this is part of a broader approach aimed at promoting the socio-economic autonomy of populations.
Source : Integrated Report 2019, Grameen Crédit Agricole Foundation. Download here
Interview with Jean-Christophe Kiren, Managing Director, CA Centre-France
©Didier Gentilhomme
Reserved for Regional Banks and Crédit Agricole Group entities, the Rural Inclusive Finance (FIR) fund, supported by the Grameen Crédit Agricole Foundation, enables investments in microfinance in emerging countries. Crédit Agricole Centre France has subscribed to it with an investment of €700,000, strengthening its mission as a bank promoting economic inclusion. Three questions for Jean-Christophe Kiren, CEO of Crédit Agricole Centre France.
The new fund open to Regional Banks echoes our mutualist and cooperative work in every way. First, its general mission—to promote economic and social inclusion in rural areas—already requires our full attention at Crédit Agricole Centre France, given the specific rural characteristics of our Auvergne and Limousin regions. Second, I was particularly touched by the issue of women's financial empowerment, which the FIR aims to strengthen. Finally, this cooperation is an opportunity for the Regional Bank to expand into microfinance by drawing on the experience of the Grameen Crédit Agricole Foundation and to develop new tools to serve the regions.
The entire Regional Fund—elected officials and employees—is committed to and participates in social impact initiatives. These initiatives range from initiatives led by the CA Centre France Foundation to equity investments in social enterprises. In this regard, the Regional Fund has a broad framework for supporting projects with a strong social impact. Furthermore, I wanted the Regional Fund to establish a €2 million fund by the end of 2019 to support projects that promote inclusion. To involve teams, it is planned that some of the funded projects will be directly identified by employees.
We are bankers… And not only that. We are also women and men committed to local life, driven by Crédit Agricole's cooperative and mutualist values. Crédit Agricole Centre France's investment in the FIR Fund, supported by the Grameen Crédit Agricole Foundation, is fully in line with this spirit. Mutual aid, sharing, and solidarity are commitments that benefit everyone.
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Source : 2019 Integrated Report, Grameen Crédit Agricole Foundation. Download here
The Grameen Credit Agricole Foundation is publishing its Letter #35, marked by the coronavirus crisis, which continues to spread and intensify. The Foundation, in constant contact with its network of 75 partner microfinance institutions (MFIs) present in nearly 40 countries, has been gathering information, analyzing it, and sharing its observations since the beginning of March. This information is very important. It allows us, at our level, to make the most relevant decisions for the management of the Foundation, to support our partners, and to ensure the effectiveness of our action, as closely as possible to their difficulties and anticipations.
The economic crisis is shaping up to be very severe, undoubtedly beyond our initial forecasts from early March, but institutions are preparing to face its effects. No stress model had anticipated this. The response will therefore also have to be systemic if we are to avoid a major failure of this industry.
To this end, donors are organizing their actions by adapting financing plans but also by offering monitoring tools, technical assistance plans, and training to strengthen the capacities of MFI teams to cope with this sudden and exceptional situation. All of these elements underline the extent to which this crisis concerns all microfinance stakeholders. The involvement and rigor of local institutions, the coordination of international networks, the support of public and private donors, and the confidence of investors will be the key values of our collective ability to overcome the challenge posed by this health tsunami.
©Philippe Lissac
For the third consecutive year, the Foundation has experienced dynamic growth in its activity: outstanding loans reached €96 million for the benefit of 75 microfinance institutions and 12 social enterprises in 39 countries. Women's entrepreneurship and the development of rural economies are at the heart of the Foundation's action: 85% of the clients of the funded institutions are women and 78% live in rural areas.
In 2019, the Foundation reaffirmed its leverage position within the Crédit Agricole Group in promoting inclusive finance. Already working closely with Crédit du Maroc and Crédit Agricole Egypt, the Foundation partnered with Crédit Agricole CIB in India to support Indian microfinance institutions. The Rural Inclusive Finance Fund (FIR) brought together no fewer than 21 regional banks, as well as Amundi and Crédit Agricole Assurances. In addition, Solidarity Bankers, Crédit Agricole's volunteer program for the Foundation's partners, concluded a successful first year: since the program's launch in 2018, 13 missions have been launched, for a total of 123 days devoted to missions.
Last year, the Foundation also developed numerous projects with institutional and technical partners. The program with the French Development Agency (AFD) is in its second phase and supports 22 microfinance institutions in sub-Saharan Africa. The Foundation also received a loan from the European Investment Bank amounting to €12 million (equivalent in CFA francs) and funding to develop a technical assistance program to support microfinance in West Africa.
In 2020, the Foundation will continue to work with its partners to support impact entrepreneurship and financial inclusion. In response to the Covid-19 crisis, the Foundation is coordinating its efforts with other donors, adapting funding and technical assistance plans to strengthen the capacities of the organizations it supports. 2020 will be a landmark year, and the Foundation will continue to contribute to the fight against poverty with ambition and commitment.
By Dominique Rombczyk, CA Val de France
©Philippe Lissac
Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA in June 2018, Solidarity Bankers is a skills-based volunteer program open to all Crédit Agricole Group employees, supporting microfinance institutions or impact businesses supported by the Foundation. Discover the opinion piece by Dominique Rombczyk, Solidarity Banker at CA Val de France, who went to Cambodia in 2019 to support Phare Performing Social Enterprise (PPSE), a social enterprise in which the Foundation is a shareholder.
When I discovered the Solidarity Bankers program, I remember searching for as much information as possible about the Grameen Crédit Agricole Foundation, Professor Yunus, inclusive finance, social entrepreneurship… Familiar concepts, shared values, but which seem to be part of another universe. The opportunity offered by Crédit Agricole and the Foundation to be able to take part in this universe was too exciting to ignore.
So I decided to apply and was selected to carry out the Solidarity Bankers mission with Cirque Phare (PPSE), a social enterprise that aims to promote social inclusion and empowerment of young Cambodians through art. The objectives of the mission were to identify the roles of the financial and management team, to train and develop a training plan on management and financial strategy concepts, and to propose financial monitoring and management tools.
The preparation phase was essential. After initial discussions with the Grameen Crédit Agricole Foundation team, I reviewed PPSE presentation documents, financial data, and general information to better understand the mission. In the weeks leading up to the departure, I held several contacts with the Foundation and the company to finalize the mission planning. The phone conversations allowed me to see the enthusiastic spirit of all stakeholders.
On September 7, 2019, we departed for Cambodia, accompanied by Hélène Keraudren-Baubé, the Foundation's Administrative and Financial Director, for a 15-day field mission. It was the Foundation's Executive Director himself who, at the airport, came to meet us with his family, thus establishing a very family-like atmosphere that remained with us throughout our stay.
During the first four days of the mission, we held several meetings with the CEO and department heads to analyze the functioning and organization of PPSE in order to jointly consider ways to optimize the structure. Ms. Keraudren-Baubé's presence during the first days of the mission was a real added value in proposing a relevant strategic plan for PPSE.
We also had the chance to attend a show put on by Cirque Phare, a show that blended theater, folk music, and Cambodian stories. The incredible performance by the young artists, who came from difficult social and economic backgrounds, was one of the highlights of my mission.
The second part of the mission focused primarily on training the financial division's teams. Training in accounting, analysis, and financial strategy helped consolidate certain concepts within PPSE's financial team, as well as identify training needs and enable the development of a training plan that the organization could subsequently implement.
After returning from the mission, many projects were underway. The training plan, the strategic planning project, the drafting of a financial communication document for the PPSE Board of Directors, the implementation of a financial monitoring tool... Several weeks after returning, I sent my final report to PPSE. The discussions in the meantime were positive, and elements established during the mission are already being used and implemented.
I return to France with the joy of having been able to share the daily lives of so many passionate, enthusiastic, and brilliant people at the Grameen Crédit Agricole Foundation and PPSE. This mission allowed me to experience firsthand how a social enterprise works and the wonderful dynamics that drive these organizations. The idea of experiencing this on a daily basis is extremely tempting.
There is also a sense of pride: that of being part of a Group that takes concrete action, on the ground, with commitment, to defend social values.
Incidentally, but it is worth mentioning, a visit to the Angkor Wat temple, an emblematic place of Cambodia (which appears on its flag), cannot fail to leave a deep impression on all visitors who go there.
By Grameen Crédit Agricole Foundation
Karel Prinsloo
The establishment of an observatory dedicated to monitoring the effects of the health crisis in conjunction with 80 partner microfinance institutions (MFIs) and social business enterprises in around forty emerging countries allows us to regularly collect information to share and draw the best lessons from it.
This week we have been focusing on how microfinance institutions are using digital channels to overcome the difficulty of direct contact with borrowers, which traditionally takes place either in branches, during group meetings, or during fund disbursements (microfinance overwhelmingly uses cash when handing over borrowed sums) or monitoring funded projects.
In our survey conducted in early April, 68% of our partner microfinance institutions indicated that they had increased their use of digital channels to overcome contact difficulties, as a result of lockdown measures or bans on group meetings. This strong growth in usage observed in the traditional finance sector is therefore also observed in the microfinance sector, where the industry is adapting at a rapid pace.
Technological means and processes including digital tools are being rapidly developed by Institutions of all sizes (the smallest having client portfolio sizes less than 10 million $, the largest well in excess of 100 million $). Since the beginning of the crisis, institutions have been producing business continuity plans, the basis for new discussions and exchanges with their funders, in which they very frequently include new digital uses.
For most institutions, the first step is to raise customer awareness about the possibility of using remote payment methods. This step is implemented through SMS messages (particularly suitable for 2G network coverage) but also through social media, when the telephone network allows it.
“[We] encourage SMS clients to use mobile money platforms for repayments as it is the safest mode at the moment” – MFI in Uganda
“[We] are starting to inform clients through social media and SMS about the possibility of repayment via terminals, mobile wallets and internet banking” – MFI in Tajikistan
For the many MFIs that did not yet have it in their range of services, the first process that was quickly developed at the start of this health crisis was that of paying installments by electronic money. This practice of remote payments is encouraged by many regulators, this is particularly the case of the Bank of Central African States (BEAC) for countries under its authority or the Central Bank of West African States (BCEAO) which decided to reduce the transfer and use fees for this form of currency. This implementation of remote payment is accompanied by mass sending of information messages to clients to explain these new procedures.
“We send numerous SMS messages to our clients reminding them how to use the mobile money code to make their loan repayments and the hotline they can call for assistance or complaints.” – MFI in Uganda
These remote services allow customers to pay their installments without having to travel (and therefore use public transport) by using the network of telephone operators' payment kiosks, which are generally dense and present even in rural areas.
The introduction of these payment methods also now allows for the disbursement of loans to customers' electronic wallets, with customers visiting these same kiosks not to pay their installments but to obtain cash disbursements for their microcredits. During the lockdown period, the use of electronic money therefore allows financing activities to continue.
“The Palestinian Monetary Authority urges microfinance institutions to provide low-interest loans to finance income-generating projects through digital channels” – MFI in Palestine
Yet, surprisingly, this crisis is being experienced by some institutions as a real opportunity to accelerate the implementation of digital platforms and the launch of new services to gain operational optimization or even relational excellence. For the leaders of partner institutions, having to invest in digital tools for reasons that are now "vital" for their institutions seems to them to be a way to accelerate investment plans that they were thinking about before the crisis. It thus allows them to immediately begin the modernization of their distribution model and their process, which has not failed to surprise us very favorably even though we know the vitality and capacity for innovation of our partners.
“This had been considered before the COVID issue […]. However, discussions are now underway regarding the possibility of launching [the mobile payment solution] accessible to all clients” – MFI in Sri Lanka
“In times like these, when everything can be considered a vector for the transmission of the virus, it is prudent to reduce cash handling. [We] have therefore taken advantage of this crisis to improve [our digital platform] to detect gaps and reduce flaws in our system” – MFI in Ghana
The economies of some countries that were already highly digitalized, such as those in East Africa, appear to be more resilient to the effects of the crisis. Microfinance institutions operating in these areas have demonstrated remarkable adaptability. For example, the Kenyan economy, which is particularly open to payment, financing, and investment transactions through electronic wallets, operates remotely, minimizing the risk of spreading the virus.
“Kenya is better prepared than other countries because of the high penetration of mobile money. The concept is widely used by the population” – MFI in Kenya
Many institutions tell us that they will be more structured and more efficient in the aftermath of this crisis. These experiences, sometimes vital to continuing their activities, seem very useful to them for considering operational performance gains in the future.
“Our team has adapted our mobile application to add a feature allowing remote requests for loan restructuring. […] We have introduced a new criterion in our monitoring tool – “emergency (coronavirus)”, which means that loan officers will have to monitor their clients remotely, obtain information and enter monitoring data into the software” – MFI in Kazakhstan
“Our new strategy focuses on transforming [our] current way of operating to adopt more digital solutions, reduce the need for physical interactions between employees and clients, and replace cash transactions with mobile payment capabilities” – MFI in Georgia
These positive effects of digitalization, achieved through the rapid changes made by microfinance institutions, are also reflected in the social enterprises in our portfolio of investments. The digitalization of operational processes is a very effective way to combat the constraints of lockdown for companies that deal directly with the public or with raw material suppliers. This is the case, for example, of a Senegalese company that, thanks to digital payments, has seen its milk collection and dairy product sales activities continue and generate growth that exceeds forecasts.
For another social enterprise, specializing in drinking water treatment, the health crisis has also led to the development of home water delivery following an online order.
Our partners are aware that the use of digital solutions is not a comprehensive solution to address all the issues raised by this systemic crisis. They expect their clients and operations to encounter economic recovery challenges, to which digital technology can only provide limited assistance. Despite the increasingly intensive use of digital channels, the commercial activity of microfinance institutions is slowing. They are all focusing on supporting their clients, taking care to address the increasing number of requests for payment deferrals while maintaining risk control and good operational quality.
In some areas, the supervisory authorities have issued directives or strong recommendations for MFIs to grant moratoriums to their clients that can last several months, which imposes a very significant activity on the institutions.
However, in the majority of the testimonies we have collected, the health crisis is perceived as a sequence that requires the various management committees of our partners to deeply reflect on their operational performance under constraints. The experiences lived and the solutions found to deal with the health crisis will be very useful for "the day after," our partners are convinced.
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Discover other articles on: Covid 19 Observatory.
